Intel foundry business has reeled in a whale of a customer: Amazon Web Services (AWS). This unexpected partnership is a crucial milestone for Intel’s contract manufacturing arm and could be the boost the company needs to revitalize its struggling operations.
The deal, announced yesterday, will see Intel foundry producing custom artificial intelligence chips for AWS using its cutting-edge 18A manufacturing process. This isn’t just a one-off project either – Intel is already eyeing future collaborations with Amazon on their upcoming 18AP and 14A processes. It’s a multi-billion-dollar vote of confidence in Intel’s capabilities, at a time when the chip giant could really use some good news.
Intel CEO Pat Gelsinger, in a memo to employees, couldn’t contain his excitement about landing such a prestigious customer; who could blame him? Amazon is the big fish in the tech world, and their decision to trust Intel with their chip manufacturing needs is a big deal.
But let’s not get ahead of ourselves. This deal, while impressive, is just one piece of a much larger puzzle that Intel is trying to solve. The company has been facing some tough times lately, with dismal second-quarter earnings that left investors feeling like they had backed the wrong horse.
In response, Intel is making some bold moves. They’re selling a stake in their Altera business, pausing construction on chip factories in Germany and Poland (sorry, Europe), and giving their foundry business more independence with its own board of directors.
Despite these changes, Intel isn’t abandoning ship on its U.S. expansion plans. They’re even set to receive up to $3 billion in funding from the U.S. CHIPS and Science Act. Obviously, we know why Uncle Sam is so invested in Intel’s success at home.
Sadly for many families, Intel will still move forward with its planned layoffs, which are expected to affect around 15,000 employees.
